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As many consumers settle in with their iPad minis, research firm IHS was working hard on the device’s teardown. The firm, previously known as iSuppli, found that the Wi-Fi 16GB base model costs roughly $188 for Apple to build, which the company sells for $329. Furthermore, the 32 GB and the 64 GB models cost an additional $31 and $62 to build respectively.

The information is interesting to hear because during its Q4 earnings, CFO Peter Oppenheimer announced that the iPad mini gross margin is “significantly below” the rest of the products in Apple’s lineup. Tim Cook did saw that “we’re unwilling to cut corners in delivering the best experienced in the world.” It is being said that Apple had to keep the price down to $329 to stay competitive with other products in the market such as Google’s Nexus 7 and Amazon’s Kindle lineup. Unfortunately for many, the Cupertino California company wasn't able to go down to a $199 price point like many had hoped. That being said, Apple did mention working on making the iPad mini production more cost-effective.

Research firm IHS further looked at the components that are being used to build the iPad mini and found that LG Display and AU Optronics are supplying roughly $80 in display components for the 7.9 inch tablet. An iFixit teardown found that Samsung is also making display components as well along with supplying the A5 chip in the iPad mini. The firm also took a look at the Microsoft RT tablet and Kindle Fire HD, with the cost of the devices being $271 for the base 32 GB model and $165 respectively.

The iPad mini went on sale this past Friday morning with many stores already being sold out of the tablet. Many of the early reviews have been quite positive with the exception of the display not being a Retina-capable one. Did you or someone you know pick one up?

That's very true, but you'd be surprised by how relatively negligible those costs are given by how spread out they are among all apple products. It'd probably not come to more than $5 an ipad.

Every brand in a company like Apple has its own budgets. Advertising, Marketing take a small bit, but Distribution network takes a majority of the chunk. As far as i know ipad mini isn't making too much profit. Other ipads for instance would be making more.

Every brand in a company like Apple has its own budgets. Advertising, Marketing take a small bit, but Distribution network takes a majority of the chunk. As far as i know ipad mini isn't making too much profit. Other ipads for instance would be making more.

Frankly in my line of work I too keep 200% profit. Its take it or leave it. Company policy. You can't argue with me on that.

there will always be cheaper products in the market. apple could charge its users 1000$ for an ipad mini and still find people to buy it. its choice over what the actual cost is. you can't call them stupid. If you had that kind of money you would throw it around too.

Last time i checked business' are in business to make money. What they make off a product is what it is, as its the consumers choice to buy it. Yes I think its overpriced. I was hoping for $299 at the most. Yet im far from shocked with the extra $30 added on. You either buy it or you don't..babies cry adults buy hahahaha!

Finally. Someone sensible. all others. Please go buy the Nexus 7, or kindlefire or micromax or whatever you can afford.

Some of us can afford one of each. It's the fact of what some consider the Apple anal insertion that bothers them. I won't be buying a mini because I honestly don't think it's worth the current "Apple tax" that is being charged. For what audience that size tablet was designed to originally target it is on the low end of the bang for the buck spectrum. Apple decided they needed to do a "me too me too" choice since they saw how popular that size READER (and that is what it is targeted towards) was. Steve was totally off base when just blew the 7" size market off. Typical Apple, my way is the only way, yet they discovered that they were quickly bleeding market share and had to rush to fill that gap. Next years version (if it gets a retina style display) may be worth it. This year there are better things for me to spend my money on.